Sunday, November 24, 2013

Zim has been raking in millions in diamond royalties

Substantial revenue from Zimbabwe’s Marange
diamond fields have evidently been going into state coffers, despite
claims to the contrary by former Movement for Democratic Change finance
minister Tendai Biti.

This is according to classified
documents from the Kimberley Process Certification Scheme (KPCS or just
KP) which was set up to filter conflict diamonds (also known as blood
diamonds) out of world markets. They show that the four mines at Marange
exported over $717 million worth of diamonds between November 2011 and
October last year and paid 15 percent of that – just over $107m – in
royalties into state coffers.

The KP research was part of the
process of clearing Zimbabwe after its suspension from the KP due to
reports that its forces had violently evicted informal miners from
Marange.

The KP Monitoring Team comprised
Abbey Chikane (brother of former director-general in president Thabo
Mbeki’s presidency, Frank Chikane) and Mark van Bockstael, chairman of
the Working Group of Diamond Experts at the World Diamond Council in
Antwerp,

The documents are not public but
they are on the KP’s restricted website which is available to any of the
many government, industry or civil society members of the KP. This has
raised some questions about why they have not been cited before to
counter the claims made by Biti.

He frequently said he never saw
any Marange revenues while he was finance minister in Zimbabwe’s
coalition government from 2009 until this year’s elections, which
Zanu-PF won.

The MDC
and many observers have often suggested that all income from Marange
due to the state went directly into Zanu-PF’s coffers. In their report
for the quarter February to April last year, the authors say statements
by ministers about the lack of transparency in the “chain of custody” of
Marange diamond production and export, “have caused serious confusion
regarding compliance to KP standards and minimum requirements.”

They refer to contradictory
statements by Zimbabwe’s ministry of mines – then controlled by Zanu-PF –
and the finance ministry and agencies then controlled by Biti’s MDC.

Chikane and Van Bockstael found
that both the Reserve Bank of Zimbabwe and the Zimbabwe Revenue
Authority (Zimra), which is part of the treasury, were both directly
involved in authorising diamond exports so they could be KP certified.

Zimra was involved in several
steps of the process, including receiving copies of customs forms which
showed that the amount paid to the producer, as noted on the KP
certificate, had been received in the producer’s bank account in
Zimbabwe.

Zimra also had to give clearance
for the shipment of the rough diamonds near the end of the process by
issuing “Release Form 21”.

Zimra “ thus holds the key to all rough diamond exports from Zimbabwe,” the report says.

“Statements
that Zimra is completely unaware of the exports of rough diamonds are
therefore alarming as these could indicate that the KPCS-compliant
export process for rough diamonds is no longer applied or not applicable
in case of rough diamond shipments from Marange.”

However, Chikane and Van
Bockstael’s report says further investigation showed that proper process
was still being implemented for all rough diamond exports, including
Marange, and that Zimra need only check its records to identify how much
revenue through royalties had been generated by rough diamond exports.

This week at the annual KP Plenary
in Johannesburg, campaigners failed to persuade the KP to block rough
diamond exports by rebel movements and exports by governments which
exploited diamonds to fuel violence.